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NHS faces possible £54bn funding gap

The NHS is facing a £44-£54 billion funding gap as its finances continue to be squeezed over the next decade, the Nuffield Trust has warned.

Even if productivity improves by the 4% a year over the next couple of years – the challenge set by NHS chief executive David Nicholson – with funding remaining flat the shortfall would still be £28-£34 billion by 2021/22, the ‘Decade of Austerity?’ report found.

To maintain quality of care the NHS must either deliver ‘unprecedented’ productivity gains or public finances must improve enough to push health spending over the rate of inflation, the think tank says.

An Ipsos MORI poll published alongside the new modelling data shows that the general public wants to protect the health service from cuts.

Half of respondents said they would not support funding cuts to the NHS and actually think taxes should increase to maintain current levels of care.

The Nuffield Trust pointed out that even if health funding was safeguarded from the cuts made in other areas of government spending, it is clear that budget increases will not return to those seen in previous years.

Report co-author and chief economist Anita Charlesworth said there are no easy options.

‘The pressures from demography, illness and increasing costs will remain.’

She added: ‘Management and clinical leadership will need to focus beyond the current four year plans, extending them for at least a decade.

‘Particular attention should be placed on improving quality and performance, and turning these improvements into cash releasing efficiency savings.’